Fear: Trump in the White House(91)

“If we’re not right,” Trump repeated, “we roll them back.”



* * *



NAFTA was another enduring Trump target. The president had said for months he wanted to leave NAFTA and renegotiate. “The only way to get a good deal is to blow up the old deal. When I blow it up, in that six months, they’ll come running back to the table.” His theory of negotiation was that to get to yes, you first had to say no.

“Once you blow it up,” Cohn replied, “it may be over. That’s the most high-risk strategy. That either works or you go bankrupt.”

Cohn realized that Trump had gone bankrupt six times and seemed not to mind. Bankruptcy was just another business strategy. Walk away, threaten to blow up the deal. Real power is fear.

Over the decades Goldman Sachs had not done business with the Trump Organization or Trump himself, knowing that he might stiff anyone and everyone. He would just not pay, or sue. Early in Cohn’s time at Goldman there had been a junior salesperson who did a bond trade for a casino with Trump.

Cohn told the young trader that if the trade didn’t settle, he would be fired. Fortunately for the trader, Trump did pay.

Applying this mind-set from his real estate days to governing and deciding to risk bankrupting the United States would be a different matter entirely.



* * *



In another discussion with the president, Cohn unveiled a Commerce Department study showing the U.S. absolutely needed to trade with China. “If you’re the Chinese and you want to really just destroy us, just stop sending us antibiotics. You know we don’t really produce antibiotics in the United States?” The study also showed that nine major antibiotics were not produced in the United States, including penicillin. China sold 96.6 percent of all antibiotics used here. “We don’t produce penicillin.”

Trump looked at Cohn strangely.

“Sir, so when mothers’ babies are dying of strep throat, what are you going to say to them?” Cohn asked Trump if he would tell them, “Trade deficits matter”?

“We’ll buy it from another country,” Trump proposed.

“So now the Chinese are going to sell it [antibiotics] to the Germans, and the Germans are going to mark it up and sell it to us. So our trade deficit will go down with the Chinese, up with the Germans.” U.S. consumers would be paying a markup. “Is that good for our economy?” Navarro said they would buy it through some country other than Germany.

Same problem, Cohn said. “You’re just rearranging deck chairs on the Titanic.”



* * *



The U.S. automobile industry was another Trump obsession. China was hurting the industry dramatically and U.S. workers even more, he alleged.

Cohn assembled the best statistics that could be compiled. Trump would not read, so Cohn brought charts to the Oval Office. The numbers showed that the American auto industry was fine. One big chart showed Detroit’s Big Three were producing 3.6 million fewer cars and light trucks since 1994, but the rest of the U.S., mostly in the Southeast, was up the same 3.6 million.

The entire BMW 3 series in the world were made in South Carolina, Cohn said. The Mercedes SUVs were all made in the United States. The millions of auto jobs lost in Detroit had moved to South Carolina and North Carolina because of right-to-work laws.

What about the empty factories? Trump asked. “We’ve got to fix this.”

Cohn had put another document, “U.S. Record in WTO Disputes,” in the daily book that Porter compiled for the president at night. But Trump rarely if ever cracked it open.

“The World Trade Organization is the worst organization ever created!” Trump said. “We lose more cases than anything.”

“This is in your book, sir,” Cohn said, and brought out another copy. The document showed that the United States won 85.7 percent of its WTO cases, more than average. “The United States has won trade disputes against China on unfair extra duties on U.S. poultry, steel and autos, as well as unfair export restraints on raw materials and rare earth minerals. The United States has also used the dispute settlements system to force China to drop subsidies in numerous sectors.”

“This is bullshit,” Trump replied. “This is wrong.”

“This is not wrong. This is data from the United States trade representative. Call Lighthizer and see if he agrees.”

“I’m not calling Lighthizer,” Trump said.

“Well,” Cohn said, “I’ll call Lighthizer. This is the factual data. There’s no one that’s going to disagree with this data.” Then he added, “Data is data.”



* * *



Cohn occasionally sought Vice President Pence’s help, always in private conversations. He made his case on steel and aluminum tariffs. “Mike, I need your help on this.”

“You’re doing the right thing,” Pence said. “I’m just not sure what I can do.”

“Mike, there’s no state going to be hurt worse than Indiana on steel and aluminum tariffs. Elkhart, Indiana, is the boat and RV capital of the world. What goes into boats and RVs? Aluminum and steel. Your state is going to get killed on this.”

“Yeah, I got it.”

“Can you help me?”

“Doing everything I can.”